As blockchain technologies reach mainstream adoption, one of the most significant forms of validation a project can receive is to be chosen by banks and government agencies to develop dApps and platforms for public use.
This is why Fantom’s announcement that it has signed a Memorandum of Understanding with OJSC Orienbank — one of the oldest and largest banks in Tajikistan — to demonstrate a CBDC solution for the Republic of Tajikistan is so monumental.
This landmark agreement places Fantom in a highly selected group of blockchain protocols chosen to build a CBDC for a national government. Fantom has long been working on a viable CBDC platform, and by demonstrating its capabilities in Tajikistan, the hope is that doors will open for similar work with other Central Banks.
CBDCs have been a hot topic in the media. The simultaneous evolution of blockchain technologies, the ever-increasing use of smart devices, and the popularity of FinTech call for digital currency and a seismic shift in the ways we think about money.
Working in concert with the government of Tajikistan, Fantom and Orienbank appear set to transform the Tajikistani Somoni into an early currency crossover to blockchain-based CBDC. This transition will leapfrog the country’s financial infrastructure into the modern digital economy.
Fantom’s low-cost and high-speed digital ledger technologies will be used to build both retail and commercial payment networks. The integration of Andre Cronje’s Iron Bank protocol will additionally enable seamless foreign exchange with simple fiat on- and off-ramps.
Following initial trials, the project majors will seek a national rollout for a solution that will automate and optimize financial activity at every level, from the work of banking administration to daily consumer activity.
The Fantom platform will, for example, play a major role in expanding financial inclusion and supporting local commerce. The Fantom CBDC mobile phone application will grant unbanked users access to digital accounts that they can use to make C2B or P2P payments or even access financial services like microloans.
Many households in Tajikistan depend on remittance inflows, the fees for which remain extraordinarily high (and far above what the UN set as a goal for sustainable development). By eliminating intermediaries and lowering transaction fees, Fantom CBDC dramatically reduces remittance costs, saving time and money for the people who use them.
For businesses, the Fantom solution can automate Value-added and Goods and Services tax collection, reducing paperwork and accelerating payment settlement. Yet higher up the economic chain, Fantom CBDC increases the resilience of payment networks and safeguards monetary sovereignty. The CBDC solution will initially undergo a period of testing and refinement. Following initial trials, Orienbank and Fantom will seek to roll out the product nationally under the sandbox regulation of Tajikistan.
This agreement is yet another confirmation of the global recognition Fantom is earning as a provider of next-generation blockchain technologies suited for real-world use cases.
Above all else, this is the latest sign that the future of our globally interconnected society is blockchain-based.